In development, changes in gene expression patterns define cell identity. These specific gene expression patterns are established at early embryonic stages, and must be passed on to daughter cells after cell division, a process termed epigenetic maintenance. The underlying mechanisms are achieved by the highly conserved trithorax-group (trxG) and Polycomb-group (PcG) proteins, which are responsible for the maintenance of transcriptional activation and repression, respectively, of numerous target genes. The roles of these proteins in transcription remain obscure, and the way they pass epigenetic information during the cell cycle is completely unknown. We found that trxG proteins are essential for transcriptional elongation. We also found that during DNA replication several trxG and PcG proteins remain stably associated with their binding sites on DNA in vivo. The goal of this proposal is to test two hypotheses: (1) that establishment of epigenetic maintenance is achieved by the complex interactions between trxG and PcG proteins; and (2) once the status of gene expression is determined, these proteins serve as epigenetic marks during the cell cycle to pass this information to daughter cells. To test the first hypothesis, we developed a technique that allows biochemical analysis of the chromatin composition of the trxG-activated and the PcG-silenced Hox target gene Ultrabithorax at very early blastoderm stages of embryo development. During these stages epigenetic maintenance is being established. Using this technique, we propose to address the following questions: (i) What is the role of PcG proteins in transcriptional repression during the establishment and maintenance of epigenetic transcription status in vivo? (ii) What are the molecular differences between active and silenced Ubx during establishment and maintenance phases? (iii) Do the opposing groups of regulators act antagonistically or independently? To test our second hypothesis, we developed a new in vivo approach to examine association of chromosomal proteins and histones with specific chromatin domains during DNA replication. This approach will be used to (iv) test the hypothesis that trxG and PcG proteins are essential epigenetic marks in re-establishing chromatin domains of the target gene following DNA replication. Given conservation of the function of trxG and PcG proteins in higher eukaryotes, these studies will greatly advance our knowledge of the basic mechanisms of transcriptional regulation and epigenetic inheritance and their relevance to diseases like cancer.